Yesterday, the Nasdaq Composite rallied strongly erasing almost all the losses from the hot US CPI release. It looks like the market can look through some higher-than-expected inflation prints as long as growth remains stable, and the Fed doesn’t embark on another tightening process. Therefore, it might be better to focus more on growth related data rather than inflation figures unless there’s a serious reacceleration in inflation that forces the Fed to reverse course and hike rates again.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite bounced on the key trendline where we had also the confluence with the red 21 moving average as the buyers stepped in to target the all-time high. The sellers, on the other hand, will need the price to reverse and break below the trendline to switch the bias from bullish to bearish and start targeting new lows.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we had also the 50% Fibonacci retracement level adding extra confluence around the trendline. The buyers have been waiting for such a pullback to increase the bullish bets into the all-time high and unless the data today doesn’t come out incredibly bad, we can expect them to reach their target pretty soon.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that late buyers can wait for a pullback into the 15685 level to have a better risk to reward setup but if the data today comes out good, then we will likely see a continuation of yesterday’s rally without a pullback as the buyers will look to pile in at the market’s open.
Upcoming Events
Today we will see the latest US Jobless Claims figures and the US Retail Sales data, while tomorrow we conclude the week with the US PPI and the University of Michigan Consumer Sentiment survey.
